Life as a finance director for HM Prison Service is like working in no other
sector, for obvious reasons. Financial management here is often determined by
such things as suicides, although the rate in UK prisons has dropped
considerably in recent years.

Macabre stories about the inmates are commonplace within the Prison Service.
For finance director Ann Beasley, these are people she works for when she goes
into the office each morning.

Compared to the substantial salaries of private sector colleagues, Beasley
earns a relatively paltry £100,000 a year and, instead of having to manage
standard key performance indicators like cash flow or footfall, Beasley’s KPIs
monitor self-inflicted deaths, serious assaults and drug use within prisons.

Beasley, however, says she has never had any desire to cross over to the
private sector, with its more lucrative rewards, but she considers less visceral
environment. For her these unusual challenges are what make the job interesting.

‘I love the public sector and I have only ever worked in the public sector. I
feel in my small way, what I do makes a difference to people’s lives. I don’t
know if I would get the same feeling in the private sector,’ Beasley says. ‘I go
out to prisons regularly and every time I meet someone who is inspirational.
There is incredible bravery and tenacity within the service.’

ON GUARD

Since her appointment as HM Prisons FD in 2003, Beasley has achieved some
remarkable milestones. She has completely overhauled the service’s financial and
procurement procedures with a radical new structure that is planned to save the
organisation £35m a year.

When she took on the role of FD, Beasley inherited a fragmented, disjointed
financial system. Each of the 128 prisons in the estate worked with a separate
set of books and used a small accounting package that sat on a local system.
Management accounts took a lengthy six weeks to consolidate, expenses were paid
in cash and more than 300 bank accounts were in use. When the time came to
prepare final year results in March, the service was still struggling to pull
together figures from December.

‘It was not a good position to be in as a finance director. I look back at
the way things were run and it just seems incredible,’ she says.

Beasley says that when she was interviewed for the position she already knew
what needed to be done and was able to tell her future employer how she planned
to overhaul the finance and procurement systems. The Prison Service board was
convinced and Beasley got the job. She hasn’t looked back since.

This year, the Prison Service has opened up a new shared service centre in
Newport, South Wales. The finances of the entire organisation has been brought
together on an Oracle ERP, and procurement and human resources functions have
started to go live on the new system.

Integrating procurement was a major priority for Beasley. After the Ministry
of Defence, the Prison Service is one of the largest government procurers and
should be benefiting from its buying power.

Beasley found, however, that procurement was disorganised and lacked
consistency. If Beasley was going to leverage the estate’s purchasing muscle,
she was going to have to completely revamp the system.

‘We had the NAO report in 2003 that was not terribly complimentary about our
procurement. We had something like 2,500 people doing procurement, which seems
incredible today, and about 1,200 people had equivalents. There were 400 people
who did it all the time and, in some cases, it was not done terribly well,’
Beasley says. This was a result of a ‘historical accident’, she adds.

‘Prisons have developed, literally, as communities within a wall. They did
everything for themselves and that was the culture. They grew their own
procurement, and had people who had worked out how to do it and do the best they
could, but there were no professionals doing the job and the NAO report picked
that up,’ Beasley explains.

She hopes the development of a new overarching procurement system, led by
qualified procurement professionals, will improve the quality of goods purchased
and lower costs.

‘For the first time we have visibility of what people are doing. It has given
us examples of off-contract spending and sub-optimal spending,’ Beasley says.
‘We know what the volumes are, so we can negotiate better deals. We can
discourage the off-contract spend, direct buyers into cheaper options and, in
the process, save plenty of money.’

HARD LABOUR

Achieving cost-savings has become a crucial part of Beasley’s job. Education
and health are the government’s spending priorities and, as a result, the Prison
Service admits in its 2005/06 business plan that it is ‘facing a challenging
financial position’ and will need to make ‘very difficult decisions’ to achieve
‘the balance of funding across existing areas of activity’.

Beasley says a radical change in the way the service managed its operations
was the only solution for coping with tightening budgets without eroding the
quality of service.

‘Ultimately, we had to change the way we ran things. You can’t keep on doing
what I call salami slicing, where you do everything that you did last year but
on a little bit less, because there comes the point where you just do everything
badly,’ Beasley says. ‘You have to say we are going to have to stop doing things
or undertake a completely different model. If we have to take this kind of money
out of our budget, we have to have a different model.’

Rather than curse the relentless pressure on her ever-decreasing budget,
though, Beasley says the drive for efficiency is a necessary one and reflects
the changing role of the public sector finance director.

‘Our budget is very challenging, but it is taxpayers’ money and I think we
owe it to them to say that we don’t want any more money than we need. I think
that my role as finance director is to drive efficiency,’ she says.

She adds: ‘I think that is one of the changes that is coming in the civil
service, where people in my position are seeing themselves less as someone that
counts the money and more as somebody who says: “I hold the conscience of the
organisation on the behalf of the public”.’

PROJECT PLANNING

The public sector’s track record when it comes to implementing large-scale IT
systems and shared service centres is hardly the best. HM Revenue &
Customs’ problems with EDS and the NHS’s botched patient record system are just
two examples.

So when Beasley decided to move the service’s entire finance and procurement
function on to an Oracle ERP, she knew the scrutiny would be intense and there
would be little room for error. ‘The history of these things in the civil
service isn’t always great. There was scepticism, so we had to get someone with
bags of credibility who could go out to people and say “I have done this
before”,’ Beasley says. ‘One of the things I have tried to do is bring people on
to the payroll who have done this before. We have deliberately brought in the
expert with the T-shirt.’

Enter Steve Hodgson, who led the implementation of the Oracle system at the
Prison Service’s new shared service centre in Newport. ‘We had Steve running our
shared service and that was very important in terms of credibility for the
organisation,’ says Beasley.

So far the implementation of the new ERP has gone smoothly, which Hodgson
attributes to taking small steps and not trying to do too much too soon. ‘The
implementation has gone very well, because we have not been too ambitious.

We have not tried to implement the technology all at once. It’s about eating
the elephant in bite-sized chunks instead of at one sitting, and keeping a good
grip on the project,’ he says.